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At this time for opening remarks and introductions, I would like to turn the conference over to Pioneer's Vice President of Investor Relations, Frank Hopkins. Please go ahead, sir.Frank Hopkins Good day, everyone, and thank you for joining us. Let me briefly go over the agenda for today's call. Scott's going to be up first. He'll review the financial and operating highlights for the second quarter of 2010, another solid quarter performance from Pioneer. He'll then comment on the company's plans for the remainder of this year and look beyond in the next couple of years out. After Scott concludes his remarks, Tim will update you on drilling results and plans for the Spraberry and the Eagle Ford Shale. Rich will then cover the second quarter financials in more detail and provide earnings guidance for the third quarter and after that as usual open up the call for your questions. So with that I'll turn the call over to Scott. Scott Sheffield Thank you, Frank. Good morning. We appreciate everyone taking the time to listen to us in this call. On slide Number three on highlights, Pioneer had adjusted income of 51 million or $0.43 per share as compared to consensus of about $0.42 per share. Excludes net gain from unusual items at 33 million, after tax that's primarily from the interest we received from IRS from our deepwater cell several years ago. And in addition the Alaska PPT tax credit, excludes non-cash market-to-market gain of about 84 million. Our production for the second quarter earned 13,500 barrels a day equivalent. We are continuing to see strong production growth in Spraberry, Eagle Ford and Alaska. This has been offset by some unclaimed curtailments and taps up in Alaska. The pipeline and Mid-Continent gas processing plan downturn roughly about 1,500 barrels a day. We will talk more about it later but obviously we are on track and expect significant production to ramp up in the first quarter.
In the first quarter of 2011, fourth quarter of 2010 from accelerated Spraberry, Eagle Ford, Alaska and recent Tunisia results. The Spraberry program is on schedule. We are running 20 rigs. We will be close to 30 rigs by the end of the year.Tim will talk about some obviously excellent results we have seen in our recent testing of the lower Wolfcamp and the strong formation. We are very excited about that. Eagle Ford we are at five rigs. We will be at seven rigs at year end. Obviously the most important thing that happened during the quarter was the transaction with Reliance allows us to accelerate, protect our acreage, more drilling in the Eagle Ford Shale play. Pioneer field like having the best only plays in the U.S. will be accelerating activity significantly. We are at 25 rigs in those two plays right now. We have already contracted the 13 rigs, we will be at 38 rigs in those two plays by the end of this year and we will be at 50 rigs by the end of 2011 in those two plays. Next item, very important also. We drilled two successful operated wells in Tunisia. We are currently drilling the third well. We will report the total results sometime in September, October later. In regard to as we get wells in production. But I think the most important thing is we have had a discovery in [ENI] block which is over half a million acres which opens up a whole new oil pathway up into that block up to the North. Obviously, we are very excited about that well and that discovery. We have increased our gas derivative positions for 2012 and 2013. Again, we are starting to see more and more producers hedge out further like we have been doing for the last several quarters. We are now 80% hedged in 2011 with upside to $100 on oil, 8.50 on gas. And we are pretty much protecting $75 oil and $6 gas, on the downside.
In 2012, we are about 63% hedged now with upside on oil to 120 and gas up to $8 protecting a floor of $6 gas and $80 crude. We are starting to layer in some hedges for 2013 on both oil and gas.Finally, financially, we reduced our debt by 279 million during second quarter. We are down to close to our target of 35% debt-to-book. We are now down at 37% at quarter end. Strong balance sheet, strong financials. Turning to slide number four. Forecasting 15% compounded annual growth rate from the years 2011 to 13. Obviously what helps this; we've got two great assets that each one will be climbing up to over 100,000 barrels a day each, both in the Spraberry and Eagle Ford over the next 10 to 12 years. The fourth quarter, we're still on track to grow 10% plus from fourth quarter '09 to fourth quarter '10. Obviously that's driven by the Eagle Ford processing plants and ramp up of our CGP, which Tim will talk about, coming on in the fourth quarter of 2010; continued Spraberry over-performance as we are seeing now with recent results; Alaska ramp-up; and getting our recent Tunisia successes on production in the fourth quarter. Read the rest of this transcript for free on seekingalpha.com